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Financial Sector Assessment Program . Implementation of Core Principles 25, 27 and 28 29 th December 2010 . What ICP coverage should mean?. Possession of Authority/Implementation of Principle. Resources/ Capacity- observance. Public consultation for transparency to make new rules.

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financial sector assessment program

Financial Sector Assessment Program

Implementation of Core Principles 25, 27 and 28

29th December 2010

G V Rao -Presentation

what icp coverage should mean
What ICP coverage should mean?.
  • Possession of Authority/Implementation of Principle. Resources/ Capacity- observance.
  • Public consultation for transparency to make new rules.
  • Accountability for action needed.
  • Assessing framework to indentify gaps in consumer protection & market stability.

( To provide industry/consumer perspectives).

G V Rao -Presentation

icp 25 consumer protection
ICP 25—Consumer Protection.

1. “ SA sets minimum requirements - insurers & intermediaries dealing with consumers.

2.“Strengthen consumer confidence in market.

3.Treat consumers fairly—info’-wise.

4.Good claim resolution process for fairness.

5.Access to information/consumer rights/obligations.

G V Rao -Presentation

essential criteria evidence
Essential criteria & Evidence.

1. Are insurers/intermediaries dealing with consumers with due skill, care, diligence?

2. Do insurers have policies & systems & provide training to employees on these?

3. Requirements to seek info’ from consumers. Are they outdated?

4. Norms for effective, fair, simple, accessible & equitable claim process, need review?

G V Rao -Presentation

one view
One view?
  • IRDA has legal framework to implement.
  • IRDA to record procedures & accountability to enable insurers & intermediaries to achieve set requirements. Within?
  • Consumers to know what these are?
  • How is that done now by each?
  • Consumer ignorance of protection-huge?
  • IRDA- oversee insurers implement goals.

G V Rao -Presentation

claim processing change proposed
Claim processing—change proposed?
  • Claim two aspects—liability & quantum.
  • Both are decided in one go & a long time.
  • Determine liability first; arbitration helps.
  • Empower customer to negotiate claim?
  • No surveyors fined for breach of COC?
  • Insurers now dictate on assessment prior to accept liability of claim.
  • Modify current claim policy condition.

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suggestion on licensed surveyors
Suggestion on Licensed Surveyors.
  • Like in TPA, Agency, have written contracts between insurers & surveyors.
  • Surveyors should be sued for delays, wrong & faulty discharge of functions & duties.
  • Surveyors like brokers must have PI for at least Rs 1 crore. So should TPAs—all outsourced outfits.

G V Rao -Presentation

icp 27 frauds
ICP 27- Frauds.
  • SA requires insurers & intermediaries take measures to prevent, detect and remedy insurance fraud.

To communicate with other SA to detect.

If there are specific legal provisions-fraud?

All in insurance chain are likely perpetrators.

Fraud results reputational, financial damage and adds to social & economic costs.

G V Rao -Presentation

essential criteria
Essential Criteria.
  • SA has powers & resources combat fraud?
  • Does legislation cover—definition fraud?
  • High business integrity standards.
  • SA requires insurers etc. devote resources.
  • Counter-fraud training to staff.
  • Co-operates with other SAs.

G V Rao -Presentation

comments on fraud
Comments on Fraud.
  • Fraud—is it defined in Indian law?
  • Vigilance covers only PSU internal staff.
  • Private sector to have CVOs? GI Council?
  • Surveyors & Brokers to have CVOs, as they are organized as Associations.
  • Insurers to have counter-fraud training?
  • Deliberate breaches of current safety legislation—is it fraud on insurers?

G V Rao -Presentation

aml combating terrorism 28
AML, combating Terrorism-28.
  • SA requires, at least life insurers and others offering investment products and

intermediaries to detect, prevent& report ML & financing of terrorism—Financial Action Task Force.

G V Rao -Presentation

essential criteria1
Essential Criteria.
  • FATF recommendations.
  • AML/CFT requirements.
  • AML regulations.
  • Sensitization of regulatory framework.
  • Maintenance of data for 5 years.
  • Insurers to develop procedures, systems & training to detect AML/CFT.

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systems processes accountability
To be listed by each insurer and other entities—and how these are supervised, audited, and action taken for implementation.Systems, processes & accountability?

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last slide
Last slide.
  • Consumer protection needs fresh look.
  • Insurer procedures must be self-contained.
  • Insurers to play bigger role than now.
  • GI council has to take on accountability.
  • Surveyors and claim process need relook.
  • Private players to have Vigilance outfits.
  • IRDA to develop inspection expertise for ICP implementation—work with others.

G V Rao -Presentation